Legislation to place restrictions on out-of-state retailers was signed by Gov. Mary Fallin.
House Bill 2531, by state Rep. Chad Caldwell, the Retail Protection Act, will require online retailers that do not have a physical presence in Oklahoma to either begin voluntarily collecting sales tax at the point of consumer purchase or sending each of their consumers a notice at the end of each year stating the total amount of purchases with a reminder that sales and use tax remittance is required.
“The governor’s signature helps protect Oklahoma businesses by lessening the benefit online retailers receive by not collecting Oklahoma Sales tax,” said Caldwell, R-Enid.
Caldwell claims this is not a tax increase as sales and use tax collection and remittance is already required by state statute. Under the current system, the taxpayer was required to claim the use tax annually on their tax return. Estimates show only 4 percent of Oklahoma taxpayers complied.
“The current system gives online retailers an unfair advantage over our local retailers,” said state Rep. Earl Sears, R-Bartlesville. “Meanwhile, these local retailers are paying their taxes; they are hiring people to work in their stores and paying their salaries; they are supporting their communities and creating economic development. This bill helps these people who are doing the right thing.”
The law takes effect Nov. 1, 2016.